The presence of market failures implies that:
A. money is not an effective tool for exchange in a market system.
B. there is an active role for government, even in a market system.
C. individuals and firms should strive to be self-sufficient rather than specialize.
D. command systems are superior to market systems in the allocation of resources.
Answer: B
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Suppose Tinsel Town Videos lowers the price of its movie club membership by 10 percent and as a result, CineArts Videos experienced a 16 percent decline in its movie club membership
What is the value of the cross-price elasticity between the two movie club memberships? A) -1.6 B) -0.625 C) 0.625 D) 1.6
Those who favor changes in the market for health care that would make it more like the markets for other goods and services favor what are generally known as market-based reforms
Indicate whether the statement is true or false
Everything else held constant, a decrease in government spending will cause the IS curve to shift to the ________ and aggregate demand will ________
A) right; increase B) right; decrease C) left; increase D) left; decrease
A closed economy is a national economy that
A) doesn't interact economically with the rest of the world. B) has a stock market that is not open to traders from outside the country. C) has extensive trading and financial relationships with other national economies. D) has not established diplomatic relations with other national economies.